Freedom Line Blog

The basic point of departure between progressives and classical liberals (a term I’m using to encompass any political ideology that supports a free market) when it comes to solving an economic problem is how each deals with scarcity. Scarcity occurs when the demand for a resource like land, labor, or capital is greater than its supply. The lack of the resource (i.e. it’s scarcity) leads to prioritizing how to use that resource most efficiently. This is where public policy disagreements come into play. Typically, progressives see just about everything as scarce, and argue for a neutral government to allocate scarce items fairly. For progressives, there is almost never an instance where the policy impulse to find a way to create more of something. Instead, government’s task is to “spread the wealth around” – be it energy through carbon credits, capital through welfare redistribution, or health care through rationing.

Classical liberals are of a different mindset. They start by questioning whether the scarce resource is correctly is really scarce. Consider health care. A progressive would argue that if the number of licensed doctors became static or declined, limiting the amount of patient visits per year would be appropriate in order to “share” the scarce resource of medical expertise over the largest amount of people. A classical liberal, though, would ask whether a licensed nurse could be allowed to take on more responsibility for diagnosing and treating patients with common ailments like colds, cuts, and other minor medical problems. By expanding the amount of people who are licensed to treat patients, the scarcity vanishes because people are allowed to visit a medical professional as much as they need to.

Now to the issue of job creation. Rep. Dennis Kucinich (D-OH) is proposing a bill to give people as young as 60 years old a financial incentive to retire early by offering early retirement with social security benefits and health care subsidies paid for from COBRA. The thinking is that are a finite amount of jobs in the American economy, and the federal government must find a way to get older workers out to create room for younger workers. Sounds like jobs are “scarce” these days, right?

Not so fast. The workers who have survived the rash of lay-offs are most likely to be those who are highly producing because businesses can no longer afford to carry dead wood on their payrolls. Moreover, if older workers are convinced to leave the job market, that means centuries of accumulated knowledge and expertise will be leaving with them. In the alternative, if it is the low-skilled elderly that Kucinich is targeting (a more likely scenario since guaranteed Social Security and COBRA benefits aren’t enticements for people making more than minimum wage), the vacancies they create won’t be enough to support younger workers with families trying to get out of apartments and into all those foreclosed houses.

The better way to look at how to create jobs isn’t to figure out how to best allocate the ones in existence – it’s figuring out how to encourage even more to be created. With more people working the economy will be that much stronger, which will eventually lead to the kind of scarcity only an employer fears: not enough hard-working, qualified people to fill all their employment needs.

The recent weeks haven’t been kind to President Obama.   Support continues to drop for his health care bill, his poll numbers are falling and his filibuster-proof majority has been lost.

Well, last night, President Obama took out some of his frustration by criticizing the Supreme Court in front of a national audience.  As the President, he has the power to trounce on judicial independence, but his display last night was historic.

According to the Legal Times, only once has a President publicly criticized the Supreme Court during a State of the Union address.   Not surprisingly, it was President Franklin Roosevelt in 1937, and even FDR didn’t call for Congress to overturn the Court (thought the justices would eventually start to capitulate shortly after the address).

Here is FDR’s attempt at judicial intimidation:

The Judicial branch also is asked by the people to do its part in making democracy successful. We do not ask the Courts to call non-existent powers into being, but we have a right to expect that conceded powers or those legitimately implied shall be made effective instruments for the common good. The process of our democracy must not be imperiled by the denial of essential powers of free government.

Here is President Obama’s criticism:

Last week, the Supreme Court reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. They should be decided by the American people, and that’s why I’m urging Democrats and Republicans to pass a bill that helps to right this wrong.

As Justice Alito gestured during the remarks, the Court did not reverse “a century of law” in its Citizens United decision.  Austin v. Michigan Chamber of Commerce was decided in 1990, not 1910.  Linda Greenhouse over at the New York Times calls out the President on this as well.

As a former constitutional law professor, President Obama should either fire his speechwriters or hit the books.

The obvious answer is no, but economist Arnold Kling would like to run an experiment between a completely decentralized market system and a government-run single payer system.  To the victor go the spoils.

Kling writes:

Instead of having a big national contest over what health care system, why not try single-payer in one part of the country and radical deregulation in another? Switzerland, which is about the size of Maryland, has different health care systems in each of its 20-odd cantons, which are about the size of Maryland counties. Surely it must be possible to try different health care approaches in Texas and Massachusetts.

Since states are supposed to be the “laboratories of democracy,” this proposal might make sense.  Of course, Massachusetts and Mitt Romney have already tried aspects of ObamaCare (state-run exchanges and individual mandates) and the results should be a sobering reminder to politicians.

Massachusetts has the highest health care premiums in the nation and state expenditures are far above projected levels.  Massachusetts’ failed experiment finally merited some political capital for supporters of a free market system when Bay State voters essentially derailed ObamaCare with their vote for Scott Brown.

Voters appear to be taking notice.  Politicians?  We’ll find out tonight.

HT: Peter Suderman

Seemingly oblivious to the message sent by Massachusetts voters – on behalf of the entire nation – last week, Congressional leaders appear to be working to rally support in their caucus behind a series of procedural tactics in an effort to salvage their extremely unpopular health care “reform” bill.  The Associated Press reports:

Democratic congressional leaders are coalescing around their last, best hope for salvaging President Barack Obama’s sweeping health care overhaul. …

Democratic congressional aides, speaking on condition of anonymity because the issue is in flux, said the latest strategy involves using a special budget procedure to revise the Senate bill.

The procedural route — known as reconciliation — would allow a majority of 51 senators to amend their bill to address some of the major substantive concerns raised by the House. That would circumvent the need for a 60-vote majority [in the Senate].

Fortunately, at least two Senate Democrats have voiced their opposition to using reconciliation as a way to circumvent the traditional legislative process.  Calling the tactic “ill-advised,” Senator Evan Bayh (D-IN) said today he does not support the move.  Likewise, Senator Blanche Lincoln (D-AR) signaled that she opposes passing health care reform via reconciliation.  (H/T  Daniel Foster at The Corner)

It’s unclear at this point whether Pelosi and Reid will garner the support necessary to pull off the procedural move.  Regardless, the fact that they’re even trying proves once again their extreme arrogance.  They just don’t get it.

Below is one of the latest cartoons from Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Any Democratic pipe dream about quick passage of their health care plan was shot down today.  Speaker Nancy Pelosi announced that the House simply doesn’t have the votes to pass the Senate version of the bill.

This means the bill will not likely be on the President’s desk by his second third fourth fifth sixth deadline, which was supposed to be the State of the Union.  The House will need to make changes and then pass those amendments on to the Senate, with their reduced majority.

The path for health care now follows moderates in the House and Senate.  After hearing the Massachusetts wakeup call loud and clear (presumably), it will be moderates that decide the fate of the bill.  It will be much harder for partisans in leadership to whip members when the political environment is so hostile for Democrats.

The best case scenario (worst case for taxpayers) is that Democrats cobble together enough votes to pass a shell of health care reform: expand Medicare and Medicaid, and ban discrimination against pre-existing conditions.  There doesn’t appear to be enough votes for a government-run public option or an individual mandate.

The current political environment for Democrats appears gloomy.  The President’s approval rating continues to hover around 50%, Democrats can claim few political victories and now there is a strong chance that a Republican will be the next Senator from Massachusetts. The GOP has not captured a Senate seat in the Commonwealth since 1972.

A victory for Republican Scott Brown would make the passage of ObamaCare exceedingly difficult and perhaps kill its legislative prospects altogether, though Democrats will not completely cede the issue to the GOP.

As voters head to the polls in the Bay State, recent predictions are confirming that Brown has a legitimate shot at the seat.  Nate Silver at FiveThirtyEight projects a Brown victory based on aggregate polling data since the first week in January.  Silver writes, “Coakley’s odds are substantially worse than they appeared to be 24 hours ago, when there were fewer credible polls to evaluate and there appeared to be some chance that her numbers were bottoming out and perhaps reversing.  However, the ARG and Research 2000 polls both show clear and recent trends against her.”

Charles Franklin at Pollster agrees with Silver.  Franklin noted, “Across all models, Brown leads by between 1.0 and 8.9 points.  Three quarters of the estimates have Brown ahead by 4 points or more.”

And now, Politico reports that some Democrats are working up contingency plans if Scott Brown proves to be the 41st vote against a government takeover of health care.  Their plan: Blame Republicans.  One Democratic staffer noted, “Sure you could say it’s worse because we didn’t pass anything.  But it might be better to get past this as soon as possible, and bring it up for a vote in the Senate, let Republicans kill it – and then blame them for everything.”

Nice strategy.  Voters will surely reward you for delivering on your message of transparency, lower taxes for the middle class and affordable health care.

Today, all eyes are on Massachusetts as Bay State voters head to the polls to decide the fate of the U.S. Senate seat previously held by the late Senator Ted Kennedy.  Will Republican State Senator Scott Brown pull it out against Massachusetts Attorney General Martha Coakley?  We will all know soon enough.

The special election between Brown and Coakley is, in large part, a referendum on President Obama’s agenda, including health care reform.  The President himself, while avoiding the health care issue as much as possible, all but admitted as much during a campaign speech for Coakley on Sunday.  If Brown does pull off a victory, Democrats will lose the 60th vote in the Senate needed to sustain their filibuster-proof majority to pass ObamaCare and possibly other legislation on President Obama’s agenda.

But that is not discouraging some in the Democrat leadership, most notably House Speaker Nancy Pelosi.  According to Alex Koppelman at Salon.com, Pelosi commented about the situation during an event in San Francisco yesterday:

“Let’s remove all doubt, we will have healthcare one way or another. … Certainly the dynamic would change depending on what happens in Massachusetts. Just the question about how we would proceed. But it doesn’t mean we won’t have a health care bill.”   

How can the Speaker be so confident?  According to a report in yesterday’s New York Times:

The White House and Democratic Congressional leaders, scrambling for a backup plan to rescue their health care legislation if Republicans win the special election in Massachusetts on Tuesday, have begun laying the groundwork to ask House Democrats to approve the Senate version of the bill and send it directly to President Obama for his signature.

In other words, Plan B for Pelosi appears to be to ask her caucus just to approve the Senate-passed health care bill, avoiding another vote in the Senate altogether.  That’s a big ask considering the numerous and significant complaints many in her caucus have expressed about the Senate bill.

If Scott Brown wins today in the most liberal state in the Union, the message to rank-and-file Democrats about health care “reform” and President Obama’s overall agenda should be clear.  If Brown wins and they continue to follow Pelosi’s lead and pass ObamaCare “one way or another,” they ignore that clear message at their own peril.

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses how the nation’s governors may be the key to defeating ObamaCare. 

Watch the video below:

Back in September, I chronicled the controversy that accompanied health care reform in the Amish community, where government assistance is usually refused as a matter of faith.

Now comes word that heavily Amish communities have lobbied to get themselves exempted from Obamacare’s insurance mandates, a set-aside that could extend to other, similarly situated groups such as Christian Scientists or Old Order Mennonites.

My hat is off to the religious groups that have been able to carve out an exemption. One wonders how far this trend will go. By the same standard, wouldn’t it be legitimate for Catholics to seek an out if they feel their faith is compromised by the abortion provisions in the new bill? What if Jehovah’s Witnesses are required to carry insurance with provisions for blood transfusions?

Of course, we don’t allow untrammeled discretion to religious beliefs.  If your religion sanctioned murder or theft, you wouldn’t get a pass from the state. Rather, the western tradition of liberty has always been strongly influenced by the concept of natural rights — that the aspects of individuals that constitute their inherent dignity as human beings should be immune from coercive influence by the state.

Health care is an area that overlaps with those rights so frequently that these early controversies will prove to be only the tip of the iceberg. Thus, health care reform doesn’t just represent government overreach — it involves a paradigm shift in the relationship between the government and the governed. If we were truly adhering to this nation’s natural rights tradition, every American would get the same right of refusal as the Amish.

Finally, a sudden bout of honesty from House Speaker Nancy Pelosi on ObamaCare.

Before you get excited, however, you should read for yourself what she had to say, as reported by CBS News:

“The House and Senate plan [is] to put together the final health care reform bill behind closed doors according to an agreement by top Democrats,” House Speaker Nancy Pelosi said today at the White House.

In other words, after days of spewing laughable tales of how “open and transparent” the legislative process on health care has been, the Speaker has decided to be “open and transparent” about how non-transparent Congressional Democrats plan to be moving forward in their efforts to pass ObamaCare.

For more on this issue, read CFIF’s commentary titled, “The Transparency of the Presidential Lie.”

You know he must have really been in the wrong. The headline: “Obama Reneges on Health Care Transparency.”

This is hardly breaking news, but now that the national media has latched onto the story and White House Press Secretary Robert Gibbs has spent the past few days parrying verbal barbs from the press, maybe President Obama and Congress will listen and actually open the doors for the American people to see what’s really going on during those backroom deals.

Mr. President, the ball is now in your court.

HT: Max Pappas

It wasn’t long ago when the Obama White House was singing the praises of California Governor Arnold Schwarzenegger.  After all, Schwarzenegger was one of very few Republicans in the country to throw his support behind ObamaCare.  

Now, however, the Governator isn’t mincing words in withdrawing that support. 

In his State of the State Address before a joint session of the California Legislature earlier today, Schwarzenegger accurately called the health care bill “a trough of bribes, deals and loopholes.”  Below are some highlights from the speech:

Congress is about to pile billions more onto California with the new health care bill.

“While I enthusiastically support health care reform, it is not reform to push more costs onto states that are already struggling while other states get sweetheart deals.

“Health care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes.

“You’ve heard of the bridge to nowhere.  This is health care to nowhere.

“California’s congressional delegation should either vote against this bill that is a disaster for California or get in there and fight for the same sweetheart deal Senator Nelson of Nebraska got for the Cornhusker State. He got the corn; we got the husk.”

Is Governor Schwarzenegger’s about face on health care reform a prelude to what’s to come in the final stretch of this debate. For the sake of the nation, we can only hope.

As top Democrats debate health care reform “behind closed doors,” it’s important to recall President Obama’s repeated promises for a more open and transparent government.

Hat tip to Breitbart.tv for the video below.

Much has been made about the secret sweetheart deal Senator Ben Nelson (D-Neb.) struck with Senate leaders in exchange for his “Yea” vote on ObamaCare. 

The deal, known as the “Cornhusker Kickback,” permanently exempts Nebraska – and only Nebraska – from paying for expanded Medicaid mandates called for in the Senate-passed “reform” bill.  In other words, taxpayers in all other states will be stuck paying the tab for Nebraska’s expanded Medicaid rolls if that provision survives final passage.

But is the “Cornhusker Kickback” constitutional?

On December 30, thirteen state attorneys general sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid calling the provision “constitutionally flawed” and threatening legal action unless the provision is dropped from the health care bill. 

The attorneys general wrote:

The undersigned state attorneys general, in response to numerous inquiries, write to express our grave concern with the Senate version of the Patient Protection and Affordable Care Act (‘H.R. 3590’). The current iteration of the bill contains a provision that affords special treatment to the state of Nebraska under the federal Medicaid program. We believe this provision is constitutionally flawed. As chief legal officers of our states we are contemplating a legal challenge to this provision and we ask you to take action to render this challenge unnecessary by striking that provision.

It has been reported that Nebraska Senator Ben Nelson’s vote, for H.R. 3590, was secured only after striking a deal that the federal government would bear the cost of newly eligible Nebraska Medicaid enrollees. In marked contrast all other states would not be similarly treated, and instead would be required to allocate substantial sums, potentially totaling billions of dollars, to accommodate H.R. 3590’s new Medicaid mandates. In addition to violating the most basic and universally held notions of what is fair and just, we also believe this provision of H.R. 3590 is inconsistent with protections afforded by the United States Constitution against arbitrary legislation. …

According to a lengthy report by CNSNews.com, “The Dec. 30 letter was drafted by South Carolina Attorney General Henry McMaster and gained the signatures of 12 other Republicans. Oklahoma Attorney General Drew Edmondson is the only Democrat, so far, to express support for the possible litigation.”

Read the letter is its entirety here (.pdf).

“As the nation patiently waits for perhaps the final cost estimate of President Obama’s health care plan, taxpayers might be surprised to learn that today the most powerful office in Washington, D.C. is not the Speaker’s office or the Oval Office, but the Congressional Budget Office (CBO).”

So writes Sam Batkins, CFIF’s Director of Public Policy, in an op-ed published today on HumanEvents.com.

Batkins goes on to note:

At perhaps no time in history has a small bureaucratic agency wielded so much power, even though the science of pricing government legislation is far from perfect. …

…Budget projections for health care vary greatly and, more often than not, vastly underestimate actual expenditures.

The Joint Economic Committee took note of the speculative nature of health care cost estimates. In a July 2009 paper, it determined that the original cost estimate for Medicare HI was off by 744%; the Medicare program as a whole came in 917% over original estimates and the Medicaid DHS program exceeded original scores by 1700%. Washington’s crystal ball tends to cloud when projecting future health care costs.

Recognizing that Congressional Democrats have become “crafty” at manipulating CBO scores, Batkins explains how they are using “an accounting sleight-of-hand that even Bernie Madoff would envy” to make their plan for a government takeover of health care appear more palatable. 

Batkins concludes the piece by writing:

Since health care entitlements never seem to go away, the affect on taxpayers has been either more debt or higher taxes.  Expect both if the Obama-Pelosi-Reid health care reform plan is ultimately passed.

Read the piece in its entirety here.

Remember back in 2006 when then soon-to-be House Speaker Nancy Pelosi promised that Democrats would “lead the most honest, most open and most ethical congress in history?” What about the repeated promises by then Candidate Obama to “broadcast [all health care] negotiations on C-SPAN so that the American people can see what the choices are?”

Of course, when it came time to “debate” health care, neither Pelosi nor Obama kept their promises.  Instead, both leaders have steered a process that has resulted in all variations of “reform” thus far being written behind closed doors, out of sight from the American people and with virtually no input from Congressional Republicans. 

As the Associated Press pointed out:

The House passed its version of the bill on a Saturday night. The Senate held its key procedural vote at 1 in the morning, and then provided a lump of coal in our stockings by forcing full passage of its bill on Christmas Eve. The House leadership banned consideration of all but one amendment not offered by leadership itself – forbidding debate on more than 150 of them – then provided just 24 hours for members to study the bill’s final text. The Senate leadership inserted so many tawdry last-minute items that analysts are still finding jokers in the deck 11 days later.

All these shenanigans have driven approval for the government health care bills even lower in public polls than the strong majorities that already opposed them a month ago.

Well, C-SPAN CEO Brian Lamb is now daring Congressional Democrats to put their money where their mouths are. 

FoxNews.com reports:

The head of C-SPAN has implored Congress to open up the last leg of health care reform negotiations to the public, as top Democrats lay plans to hash out the final product among themselves.

C-SPAN CEO Brian Lamb wrote to leaders in the House and Senate Dec. 30 urging them to open ‘all important negotiations, including any conference committee meetings,’ to televised coverage on his network.

‘The C-SPAN networks will commit the necessary resources to covering all of the sessions LIVE and in their entirety,’ he wrote.

There’s only one problem.  Holding true to their back-room strategy, Congressional Democrats are reportedly going to shut Republicans and the American people out of the process again as they seek to combine the House and Senate versions of “reform.”  Maggie Haberman and Charles Hurt of the New York Post reported today:

Congressional Democrats plan to take final negotiations on the massive health-care overhaul behind closed doors — far from the prying eyes of the public and most lawmakers.

Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) have decided not to impanel a bipartisan ‘conference committee’ because it would give Republicans an opportunity to stonewall certain procedural votes.

Instead, they will do it themselves informally out of their offices without formal public meetings.

And they wonder why the overwhelming majority of Americans oppose their plan … whatever that final plan may be.

If the Senate’s hyperpartisan Christmas Eve healthcare vote and the Copenhagen climate summit “agreement” constitute “victories” for Barack Obama, one would fear to see anything he’d acknowledge a “failure.” 

At every opportunity, the White House, liberal pundits and media apologists herald both as victories for a foundering presidency.  But just as Obama’s performance has failed to remotely match his lofty campaign rhetoric, neither one comes anywhere close to his professed goals. 

After all, remember the government-run, single-payer system that Obama said was his goal prior to his presidency?  No sign of it in the Senate healthcare bill.  In fact, the bill doesn’t even contain the “robust public option” that Obama sought after he realized single-payer was a bridge too far.  And remember how he demanded them before the August Congressional recess?  Some “victory.” 

And the same goes for the silly Copenhagen climate summit.  Obama arrogantly trumpeted a historic “agreement,” but the only agreement was an agreement-to-agree-to-something-to-be-agreed-upon-at-some-future-climate-summit.  There were none of the economically-crippling carbon limits demanded by environmental extremists, and none of the billions (trillions?) of largess demanded by developing nations. 

The reality is that Obama needes something – anything – to create the mirage of accomplishment for a White House that has failed so miserably that his approval is lower than any President in history at this stage.   His minions and media chorus may label these things “victories,” but that doesn’t make it so.

Ross Douthat, who took over as the New York Times’ house conservative after Bill Kristol‘s brief stint during the 2008 election, has become increasingly insightful as he has settled into his new perch. In an entry on a NYT blog today, Douthat dissects the criticisms of the GOP approach to health care by The New Republic’s Jonathan Chait (a liberal) and former Bush speechwriter David Frum (a self-loathing Republican). Douthat doles out judicious criticism to each, but his own diagnosis is much more provocative:

In the end, when the history of the health care debate is written, I don’t think any of the choices that G.O.P. lawmakers made this year will loom particularly large. The choices that they made, or didn’t make, across the last fifteen years are what made all the difference. Between the defeat of Clintoncare and the election of Barack Obama, the Republicans had plenty of chances to take ownership of the health care issue and pass a significant reform along more free-market, cost-effective lines. They didn’t. The system deteriorated on their watch instead. And now they’re suffering the consequences.

Absolutely true. As good as many of the free-market healthcare reform ideas swimming around are, the reality is that, with the exception of marginal advances on Health Savings Accounts — a necessary, but not sufficient aspect of reform — the GOP has done nothing to advance an alternative vision for health care. And the party’s one major accomplishment was a massive and unfunded expansion of the welfare state in the form of the Medicare prescription drug benefit.

One other interesting note from Douthat:

As far as the Republicans’ rhetorical emphases go, meanwhile, I’d really prefer to live in a world where the G.O.P. hadn’t decided to remake itself as the party of Medicare now, Medicare forever. But judged purely as a short-term political strategy designed to derail the legislation, it’s hard to argue with the results. Public opinion has turned dramatically against the bill, and every swing-state Democrat who votes for it is courting political suicide.

Me: I’d gladly trade away potential GOP wins next year for defeating the health care bill now. After all, the point of  political victory is to influence policy outcomes.  And once the government embeds itself in the healthcare industry there will be no turning back — like our British counterparts, most of the domestic policy agenda will become focused on who can better manage a bloated welfare state.  The next few weeks may thus see the biggest epochal shift in American politics since the constituent parts of Reaganomics made their way through the Congress.

Senator Richard Burr (R-NC) on Harry Reid’s (D-NV) health care compromise with Nebraska Senator Ben Nelson:

You’ve got to compliment Ben Nelson for playing, ‘The Price Is Right.’  He negotiated a Medicaid agreement for Nebraska that puts the federal government on the hook forever.  This isn’t the Louisiana Purchase, it’s the Nebraska windfall … this isn’t how this process is supposed to work.

Sadly, the “Louisiana Purchase” already took place during Senate negotiations.  Now, taxpayers are “on the hook” for Louisiana and Nebraska.  This is not because Nebraska and Louisiana are especially important for health care reform, but because two politicians from those states were able to game the system better than their colleagues.

This is why our national debt is over $12 trillion.